Differences Between Ifrs & a-Ifrs

Topics: Financial statements, International Financial Reporting Standards, Balance sheet Pages: 2 (591 words) Published: August 10, 2010
Corporations in Australia have started adopting IFRS as its domestic financial reporting standards since 2005. Although AIFRS applied almost whole contents and wording of IFRS, owing to the different domestic legislative environment, some modifications were needed and included the removal of certain options permitted or wording changes under IFRS. The species of these differences that exist between IFRS and AIFRS can be universally sorted as follow: 1. Recognition differences.

2. Measurement differences.
3. Presentation and disclosure differences.(Hoyle,542)
Some examples of each difference are argued following.

Recognition Differences
The differences between IFRS and AIFRS relate to whether an item is recognized or not, when it is recognized and so forth. (Hoyle, 542) For example, the classification of dividends paid is different under AIFRS and IFRS. Under AIFRS, dividends paid should be put into cash flows from financing activities. Whereas, dividends paid can be classified as cash flows from financing activities or from operating cash flows in order to help users to decide the ability of an corporation through operating cash flow to pay dividends.( Porter B,2005)

Source: David Jones, ‘statements of financial performance 2005’www.davidjones.com.au

Measurement Differences
Because of different standards or demand of AIFRS and IFRS, the methods of measurement could be distinctive. The example of this sort of difference relates to the property, plant and equipment. AIFRS is not permitted to decrease the carrying amounts of property, plant and equipment by government grants. (Porter B, 2005) Under IFRS, according to IAS 20 ‘Accounting for Government Grants and Disclosure of Government Assistance’, the carrying amounts of property, plant and equipment may be reduced by government grants. Moreover, the assets and liabilities on the balance sheet of AIFRS entities are indicated the total value of grant while IFRS entities can choose and...
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